Faced with a scenario of decelerating inflation, Finance executives expect growth in sales and profitability for their companies by 2025according to the 21st annual survey on investment and financing, presented by EY Argentina within the framework of the 45th Annual Convention of the Argentine Institute of Finance (IAEF), which takes place this Thursday and Friday in Mendoza. They are optimistic about the future, but the worrying fact is that, although they invested more in 2024, they did not generate more jobs.
Regarding the investmentsthe businessmen argued that will increase compared to 2024 and, this year, they were mainly focused on fixed assets, incorporation of technology and increasing working capital. However, 61% said that these investments did not generate the need for new laborThis is the result of a joint survey conducted by both entities every year among more than 100 of the main leading companies in Argentina.
“This year, Businessmen were very optimistic about growth prospects, with the focus on agriculture and energy“, said Paul of Gregorypartner at EY Argentina. He highlighted that the responses “indicate that greater macroeconomic stability and a slowdown in inflation would generate an increase in investment.”
How companies were financed in 2024
Regarding the sources of financing that companies used for their projects, 28% did so through local banks.23% were self-financed and 14% used the capital market. Meanwhile, the rest did so through financing from the parent company (13%), suppliers (10%) and foreign financial institutions (6%).
“The energy, agriculture and infrastructure sectors continue to be the sectors with the greatest potential to boost growth and exports,” highlighted EY! Argentina. And one of the trends they observe is that, although agriculture has always been one of the most relevant sectors of our country’s economy, “for three years the energy sector appears to be the one with the greatest growth, according to the consensus of those surveyed.”
Businessmen’s expectations regarding Javier Milei’s government
According to De Gregorio, “from the results of the responses, it is clear that “Deep changes were needed to stimulate investment and development.”
When expressing their expectations about the management of the current government, the executives pointed out that the Tax and administrative simplification and a government-union-business agreement These are the main actions of the State that would improve competitiveness and facilitate its investment plan.
Meanwhile, regarding the measures that could promote confidence in deciding on an investment, they foresee a clear and sustainable economic plan (24%), a stable exchange rate policy (23%), a tax reform that stimulates investment (20%), investment protection laws and international agreements (10%).
What businessmen ask for in order to invest
Companies claim that the reduction of social security contributions in exchange for a new job (30%), the reduction of rates in exchange for reinvestment of profits (27%), Accelerated amortization of capital investments (20%) and tax relief on strategic investments (15%) are measures that could improve the investment climate in Argentina.
Finally, finance executives They stated that global trends that may affect investment planning are high financing rates (33%), the rise of populism or extreme nationalism (21%), the volatility of commodity prices (20%) and the growth of poverty and inequality in emerging countries (14%).
Finally, the executive highlighted that “There is consensus to reaffirm the course of changewith clear rules of the game that contribute to sustained growth and that allow us to dream of a better Argentina.”
Source: Ambito
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